China’s total number of cinema screens now exceeds the US

Start adding items to your reading lists:

Save this item to:

This item has been saved to your reading list.

China to be No.1 globally in IMAX 3D screens by 2021

Shanghai, 16 Jun 2017 - In 2016, China’s total number of cinema screens now exceeds those of the US. China had 41,056 cinema screens compared to 40,928 in the US, according to PwC’s Global entertainment and media outlook 2017-2021. By 2021, the country will have more than 80,000 screens, nearly twice as many as the US.

“Cinemas will continue to be built in China at a phenomenal rate. Growth will be driven by new screens being built especially in Tiers 3 -5 cities, especially among middle-class cinemagoers with rising disposable incomes. Consumers are also prepared to pay a premium for a big screen experience because of increased cinema accessibility in town centres, especially in lower tier cities,” said Jane Kong, PwC China Entertainment and Media Partner.

In 2016, China was the world’s second largest box-office market with revenue of USD6.2bn, behind the U.S with revenue of USD10.6bn. For a variety of reasons, China’s box office slowed down in 2016. However, despite the short-term dip, revenue is still growing although not at the double-digit rate that was reported in 2015. Overall, China remains a lucrative market for cinema with revenue expected to grow at a staggering 11.6% CAGR from US$6.2bn in 2016 to US$10.7bn by 2021.

China is on course to be No.1 globally in the number of IMAX 3D screens by 2021. Approximately 575 IMAX 3D screens is to be built in China by 2021, up from 296 3D screens in 2016. A figure higher than anywhere else in the world.

“China is a major market for bolstering revenue for IMAX 3D. Chinese consumers have responded well to 3D films. The advantages of domestic IMAX’s growth is the opportunity to introduce technology right away. This changes the mind set of consumers to be more willingly to pay a premium for a cinematic experience,” added Ms. Kong.

Also of significant growth is the performance of Cinema advertising revenue, which experienced a rapid increase and is expected to be worth US$939mn by 2021 at a high CAGR of 9.8%, up from US$587mn in 2016.

Asia Pacific is the primary source of growth for the global cinema industry, and by a considerable distance. Box office revenue in Asia Pacific is expected to rise at a 7.9% CAGR in the next five years to reach US$20.4bn in 2021. This underlines the growing popularity of Cinema in Asia Pacific (and China in particular) as rapid urbanisation continues, and cities modernise by building more cinemas into shopping centres to cater to the rising middle class.

Furthermore, Asia Pacific box office revenue will significantly eclipse that of North America, and will have more than double the screens (over 100,000) in the region compared with about 46,000 in North America by 2021.

Within the segment, a growing trend is towards a "Pan Entertainment" approach to US and Chinese movie productions, creating multiple revenue streams from the IPs they created or possessed. For example, the storylines or characters of popular local literature or fictions would be modified into a movie, online/mobile game and premium products. Continuous growth of foreign co-productions with Chinese studios would support the growth of locally produced movies and drive up the quality of films and boost foreign investments into Chinese cinema.

Commenting on the developments, Brian Choi, PwC China Entertainment and Media Partner said: “Continuous growth of China and Hollywood co-productions supports the growth of locally produced films. It will drive up the quality of films and boost foreign investments into Chinese cinema. Revenue-sharing platforms can be in the exchange of knowledge and talent, and boost global appeal of Chinese films outside their home market.

Looking ahead, it will be important for film companies to consider the balance of global and local cultures in content and cater to the Chinese audience’s demand for entertainment and talent.”